FCC And DOJ Give Thumbs Up For AT&T-DirecTV Mega Merger

AT&T may have failed in its attempt to acquire rival wireless provider T-Mobile for $39 billion back in 2011, but as for its proposed $48.5 billion acquisition of satellite TV service giant DirecTV, federal regulators are set to approve the deal. Doing so would end a more than yearlong review process that began in May of 2014 when the deal was first announced.

While the deal is set to be approved, there are several conditions that AT&T must follow, all of which are outlined in an order Federal Communications Commission (FCC) Chairman Tom Wheeler has circulated to the agency's other commissioners recommending the deal. One of the requirements is that AT&T must expand its GigaPower fiber network.


To prevent AT&T from abusing its position, another requirement of the deal is that AT&T will not be allowed to exclude its video service from any data caps imposed on broadband Internet customers. The idea behind the requirement is that it would be an unfair advantage to allow unlimited viewing of its own streaming video, while services like Netflix would suffer if AT&T's Internet customers hit their data ceiling.

In the name of transparency to interconnection practices, AT&T will also be required to submit all completed interconnection agreements to the FCC and provide regular reports on network performance.

"These strong measures will protect consumers, expand high-speed broadband availability, and increase competition," Wheeler said.

Four other commissioners still have to vote on the deal. Should it ultimately be approved, as expected, AT&T would have over 26 million TV subscribers in the U.S. That's more than Comcast, which recently abandoned its attempts to acquire Time Warner Cable when regulatory hurdles seemed too high to leap.

Just as important as the number of customers is the negotiating power AT&T would have with big media companies.